Tax Morale and its Drivers: Empirical Evidence from Ghana
Abstract
Using the binary logistic regression model, this study analyzes the statistical relationships between tax morale and its drivers as developed by the World Values Survey (WVS) on 1,552 respondents in Ghana between 2010 and 2014. The findings show that age has a significant positive relationship with tax morale, whereas participation in national-level elections also has a significant positive relationship with tax morale. Secondary education and above have a positive relationship with tax morale, but the relationship is negative below secondary education. One's employment status has a positive but insignificant relationship with tax morale, but income factors have a negative relationship. Confidence in government and parliament has a positive but insignificant relationship with tax morale. Finally, preference for the redistribution of wealth has a significant positive relationship with tax morale, while trust in others has an insignificant positive relationship with tax morale. The study provides country-specific drivers of tax morale (with expanded variables) and their relationships with tax morale in direct response to a suggestion by Daude, Gutiérrez, & Melguizo in their study in 2012 and as an improvement upon a similar study conducted in Ghana by Ibrahim, Musah, & Abdul-Hanan in 2015.
Downloads
References
Adisah-Atta, I. (2017). Financing health care in Ghana: Are Ghanaians willing to pay higher taxes for better health care? Findings from Afrobarometer. Social Sciences, 6(3). https://doi.org/10.3390/socsci6030090
Alasfour, F., Samy, M., & Bampton, R. (2016). The determinants of tax morale and tax compliance: Evidence from Jordan. In Advances in Taxation (Vol. 23). https://doi.org/10.1108/S1058-749720160000023005
Allingham, M. G., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1(3–4), pp. 323–338.
Alm, J., & McClellan, C. (2012). Tax morale and tax compliance from the firm’s perspective. Kyklos, 65(1), 1–17. https://doi.org/10.1111/j.1467-6435.2011.00524.x
Alm, J., & Torgler, B. (2004). Estimating the determinants of tax morale. Proceedings Annual Conference on Taxation and Minutes of the Annual Meeting of the National Tax Association, 97(November 2016), 269–274. https://doi.org/10.2307/41954848
Ameyaw, B., & Dzaka, D. (2016). Determinants of Tax Evasion: Empirical Evidence from Ghana. Modern Economy, 07(14), 1653–1664. https://doi.org/10.4236/me.2016.714145
Armah-Attoh, D., & Awal, M. (2013). Tax administration in Ghana: perceived institutional challenges. Afrobarometer Briefing Paper, 124(1), 9.
Benk, S., Budak, T., Yüzba, B., & Mohdali, R. (2016). The Impact of Religiosity on Tax Compliance among Self-Employed Turkish Taxpayers. Religions, 7(4), 1–10. https://doi.org/10.3390/rel7040037
Bilgin, C. (2014). Determinants of tax morale in Spain and Turkey: An empirical analysis. European Journal of Government and Economics, 3(1), 60–74. https://doi.org/10.17979/ejge.2014.3.1.4297
Blaufus, K., Braune, M., Hundsdoerfer, J., & Jacob, M. (2015). Self-serving bias and tax morale. Economics Letters, 131, 91–93.
Chong, K. R., & Arunachalam, M. (2018). Determinants of enforced tax compliance: Empirical evidence from Malaysia. Advances in Taxation, 25, 147–172. https://doi.org/10.1108/S1058-749720180000025007
Cyan, M. R., Koumpias, A. M., & Martinez-Vazquez, J. (2016). The determinants of tax morale in Pakistan. Journal of Asian Economics, 47, 23–34. https://doi.org/10.1016/j.asieco.2016.09.002
Daude, C., Gutiérrez, H., & Melguizo, A. (2012). Working paper no. 315: What drives tax morale? OECD Development Centre, 315.
Dell’Anno, R. (2009). Tax evasion, tax morale, and policy maker’s effectiveness. The Journal of Socio-Economics, 38(6), 988–997.
Dörrenberg, P., & Peichl, A. (2018). Tax morale and the role of social norms and reciprocity. Evidence from a randomised survey experiment. Evidence from a Randomized Survey Experiment (July 16, 2018).
Dörrenberg, P., & Peichl, A. (2021). Tax Morale and the Role of Social Norms and Reciprocity. Evidence from a Randomized Survey Experiment. SSRN Electronic Journal, 11714. https://doi.org/10.2139/ssrn.3237993
Eichenberger, R., & Frey, B. S. (2002). Democratic governance for a globalised world. Kyklos, 55(2), 265–287.
Filippin, A., Fiorio, C. V, & Viviano, E. (2013). The effect of tax enforcement on tax morale. European Journal of Political Economy, 32, 320–331.
Frey, B. S., & Torgler, B. (2004). Taxation and conditional cooperation.
Frey, B. S., & Torgler, B. (2007). Tax morale and conditional cooperation. Journal of Comparative Economics, 35(1), 136–159. https://doi.org/10.1016/j.jce.2006.10.006
Gaviria, A., Graham, C., & Braido, L. H. B. (2007). Social mobility and preferences for redistribution in Latin America [with comments]. Economía, 8(1), 55–96.
Gupta, R., & McGee, R. W. (2010). A comparative study of New Zealanders’ opinion on the ethics of tax evasion: Students v. accountants. New Zealand Journal of Taxation Law and Policy, 16(1), 47–84.
Horodnic, I. A. (2018). Tax morale and institutional theory: a systematic review. International Journal of Sociology and Social Policy, 38(9–10), 868–886. https://doi.org/10.1108/IJSSP-03-2018-0039
Ibrahim, M., Musah, A., & Abdul-Hanan, A. (2015). Beyond enforcement: what drives tax morale in Ghana? Humanomics, 31(4), 399–414. https://doi.org/10.1108/H-04-2015-0023
International Monetary Fund. (2018, April). Regional economic outlook: Sub-Saharan Africa: Domestic revenue mobilisation and private investments (World economic and financial surveys series). Washington D.C.: International Monetary Fund.
Kemme, D. M., Parikh, B., & Steigner, T. (2020). Tax Morale and International Tax Evasion. Journal of World Business, 55(3), 101052. https://doi.org/10.1016/j.jwb.2019.101052
Kondelaji, M. H. H., Sameti, M., Amiri, H., & Moayedfar, R. (2016). Analysing determinants of tax morale based on social psychology theory: A case study of Iran. Iranian
Lago-Peñas, I., & Lago-Peñas, S. (2010). The determinants of tax morale in comparative perspective: Evidence from European countries. European Journal of Political Economy, 26(4), 441–453. https://doi.org/10.1016/j.ejpoleco.2010.06.003
Leonardo, G., & Martinez-Vazquez, J. (2016). Politicians, Bureaucrats, and Tax Morale: What Shapes Tax Compliance Attitudes? International Studies Program Working Paper No. 16-08, August, 5–43. http://isp-aysps.gsu.edu
Lisi, G. (2015). Tax morale, tax compliance and the optimal tax policy. Economic Analysis and Policy, pp. 45, 27–32.
Lubian, D., & Zarri, L. (2011). Happiness and tax morale: An empirical analysis. Journal of Economic Behavior & Organization, 80(1), 223–243.
Luttmer, E. F. P., & Singhal, M. (2014). Tax morale. Journal of Economic Perspectives, 28(4), 149–168. https://doi.org/10.1257/jep.28.4.149
Madi, N., Kamaluddin, A., Janggu, T., Ibrahim, M. B. A., Samah, A. B. A., & Jusoff, K. (2010). Tax Literacy among Employees: Sabah and Sarawak’s Perspective. International Journal of Economics and Finance, 2(1), 218–223. https://doi.org/10.5539/ijef.v2n1p218
Martinez-Vazquez, J., Koumpias, A. M., & Leonardo, G. (2021). Trust in Government Institutions and Tax Morale. FinanzArchiv, 77(2), 117. https://doi.org/10.1628/fa-2021-0006
McGee, R. W. (2012). Income level and the ethics of tax evasion. In The Ethics of Tax Evasion (pp. 485–495). Springer.
McGee, R. W. (2016). Should governments tax the rich and subsidise the poor? An empirical study of opinion in 60 countries. An Empirical Study of Opinion In, p. 60.
McKerchar, M., Bloomquist, K., & Pope, J. (2013). Indicators of tax morale: an exploratory study. EJTR, 11, 5.
Nurani, M., & Islami, I. N. (2020). The role of tax morale as a mediator in the relationship between religiosity and tax compliance in South Sumatra. ACCRUALS (Accounting Research Journal of Sutaatmadja), 4(01), 120–134.
Nyamapheni, J. (2021). Determinants of tax morale: Cross-sectional evidence from Africa.
OECD. (2019). What is Driving Tax Morale? Public Consultation Document, pp. 1–59. https://www.oecd.org/tax/tax-global/public-consultation-document-what-is-driving-tax-morale.pdf
Orviska, M., & Hudson, J. (2003). Tax evasion, civic duty and the law-abiding citizen. European Journal of Political Economy, 19(1), 83–102.
Rashid, H., Warsame, H., & Khan, S. (2021). The differential impact of democracy on tax revenues in developing and developed countries. International Journal of Public Administration, 44(8), 623–635.
Rothstein, B., & Stolle, D. (2008). The state and social capital: An institutional theory of generalised trust. Comparative Politics, 40(4), 441–459.
Schmölders, G. (1960). Das Irrationale in der öffentlichen Finanzwirtschaft [The irrational in public finance]. Frankfurt Am Main: Suhrkamp.
Strielkowski, W., & ?ábelková, I. (2015). Religion, culture, and tax evasion: Evidence from the Czech Republic. Religions, 6(2), 657–669.
Strümpel, B. (1969). The contribution of survey research to public finance. Quantitative analysis in public finance, 14(2).
Tekeli, R. (2013). The effects of cultural differences and politics on tax morale: The case of Italy and Turkey. International Conference on Economic and Social Studies, 10(11).
Torgler, B., Demir, I. C., Macintyre, A., & Schaffner, M. (2008). Causes and consequences of tax morale: An empirical investigation. Economic Analysis and Policy, 38(2), 313-339.
Torgler, B. (2003). Tax morale, rule-governed behaviour and trust. Constitutional Political Economy, 14(2), 119–140. https://doi.org/10.1023/A:1023643622283
Torgler, B. (2005). Tax morale and direct democracy. European Journal of Political Economy, 21(2), 525–531. https://doi.org/10.1016/j.ejpoleco.2004.08.002
Torgler, B. (2006). The importance of faith: Tax morale and religiosity. In Journal of Economic Behavior and Organization (Vol. 61, Issue 1). https://doi.org/10.1016/j.jebo.2004.10.007
Torgler, B. (2011). Tax morale and compliance review of evidence and case studies for Europe (Working Paper No. 5922). The World Bank Policy Research. December.
Torgler, B., & Schaltegger, C. (2006). Tax morale: a survey with a special focus on Switzerland. Swiss Journal of Economics and …, 142(3), 395–425. http://ideas.repec.org/a/ses/arsjes/2006-iii-4.html
Torgler, B., & Schneider, F. (2007). What shapes attitudes toward paying taxes? Evidence from multicultural European countries. Social Science Quarterly, 88(2), 443–470.
Traxler, C. (2010). Social norms and conditional cooperative taxpayers. European Journal of Political Economy, 26(1), 89–103. https://doi.org/10.1016/j.ejpoleco.2009.11.001
Trüdinger, E. M., & Hildebrandt, A. (2013). Causes and contexts of tax morale: Rational considerations, community orientations, and communist rule. International Political Science Review, 34(2), 191–209. https://doi.org/10.1177/0192512112447117
Wahl, I., Muehlbacher, S., & Kirchler, E. (2010). The impact of voting on tax payments. Kyklos, 63(1), 144–158. https://doi.org/10.1111/j.1467-6435.2010.00464.x
Williams, C. C., & Krasniqi, B. (2017). Evaluating the individual- and country-level variations in tax morale: Evidence from 35 Eurasian countries. Journal of Economic Studies, 44(5), 816–832. https://doi.org/10.1108/JES-09-2016-0182
Yamamura, E. (2014). Trust in government and its effect on preferences for income redistribution and perceived tax burden. Economics of Governance, 15(1), 71–100.
Yew, B., Milanov, V., & McGee, R. W. (2015). An analysis of individual tax morale for Russia: Before and after flat tax reform. International Business Research, 8(1), 60–80.
Copyright (c) 2023 jones adjei ntiamoah, Peter Arhenful, Collins Owusu Kwaning, Joseph Asare
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of a revised paper in the light of suggestions of the reviewers, editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
